Int'l Cooperation

Last updated: Monday, November 19, 2018

Vietnam - Australia: Towards Strategic Partnership

Posted: Monday, March 12, 2018

There have been strong developments in the Vietnam-Australia relationship since the signing of the Joint Statement on Comprehensive Partnership in 2015. On the solid foundation of this relationship and the potential for cooperation, the two sides have agreed to soon upgrade the Vietnam-Australia relationship to a Strategic Partnership, with two-way trade worth up to US$10 billion in the coming time.

Vietnam and Australia established diplomatic relations in 1973. The bilateral relationship has grown steadily with two major turning points.

The first was in 2009 during Party General Secretary Nong Duc Manh's visit to Australia, the two sides signed a joint statement on upgrading the bilateral relations to the Comprehensive Partnership, based on six major areas of cooperation: political relations and public policy exchanges; economic and trade relations; development assistance and technical cooperation; defence and security relations; support people-people links; and regional and global issues. This Comprehensive Partnership was implemented through the 3-Year Action Plan (2010-2013).

The second major turning point in bilateral relations took place in March 2015 on the occasion of Prime Minister Nguyen Tan Dung's visit to Canberra. The two sides signed the Declaration on Strengthening Vietnam-Australia Comprehensive Partnership. The declaration identified five major areas of cooperation: regional and international cooperation; trade and investment, industry development; development assistance; defence, law enforcement and security ties.

The development of close relations between the two countries led to the development of two-way trade turnover. According to statistics released by the General Department of Customs on March 5, in the first month of 2018, import-export turnover between Vietnam and Australia reached US$595 million, up 58.9 percent over the same period, in which exports of goods reached US$305 million, up 42.8 percent, and goods imports US$290 million, up 80.2 per cent.

In the year 2017, export turnover between Vietnam and Australia increased by 22.7 percent compared to 2016, reaching US$6.45 billion. Of which, Vietnam's exports to the Australian market reached US$3.28 billion, an increase of 16.1 percent over 2016, accounting for 1.5 percent of Vietnam's total export turnover to all trade partners in 2017. Imports of goods originating from Australia into Vietnam reached US$3.17 billion, up 30.5 percent over 2016, accounting for 1.5 percent of total import value of both in 2017.

In 2017, Australia ranked 14th among more than 200 trading partners of Vietnam in the world. Australia has always been in the group of 20 out of 200 countries with the largest import and export volume with Vietnam.

Statistics also noted over the past years, Vietnam has always enjoyed a surplus trade balance in the exchange of goods with Australia, but it tends to decrease. In the two years 2013-2014, Vietnam's trade balance surplus with Australia was US$1.76 and US$1.84 billion, respectively. In 2015 and 2016, the surplus was US$816 million and US$403 million respectively; 2017, a surplus of US$116 million, the lowest level recorded in the past five years.

At present, the two countries have affirmed their determination to promote more economic-trade-investment cooperation, enhance the two-way trade turnover, increase investment in the fields where the two sides have complementary advantages such as agriculture, education, infrastructure and innovative technology. The two sides assigned the relevant ministries and branches of the two countries to develop specific contents for the establishment of a dialogue mechanism at ministerial level in the field of trade and economic, towards the establishment of economic partnership in the coming time.

The two sides have also agreed to consult and exchange information in order to step by step remove barriers to trade in agricultural and aquatic products, to promote joint ventures and linkages, to form production and supply chains, creating high added value for agricultural products, thus contributing to raising the incomes and living standards of farmers of the two countries.

According to economic experts, the opportunity for Vietnamese goods to access the Australian market is huge, but demand is also strict. Moreover, the Asean-Australia/New Zealand Free Trade Agreement (AANZFTA) is being implemented and in the context of increasing regional and global integration, it will further strengthen Vietnam-Australia trade relations.

Therefore, Vietnamese enterprises need to put themselves in international standards to meet the increasing demands of consumers and compete with goods from many other countries.

About investment, Australia has about 396 investment projects in Vietnam with a total registered capital of nearly US$2 billion, ranked 19th out of 116 countries and territories investing in Vietnam. In particular, the Australian projects focus mainly on processing industry, manufacturing, accommodation and catering.

Some of Australia's major investment projects in Vietnam are the Global Aluminum Company of Vietnam with a total investment capital of US$234.8 million in Ba Ria - Vung Tau province; Project of Bluescope Steel Vietnam Co., Ltd, also in Ba Ria - Vung Tau province with a total investment of US$105 million; the US$100-million Phu Yen Equestrian Stadium.

Cooperation in national defence and security between Vietnam and Australia has also been on an upward trend. Cooperation in education, training, labour, tourism and people's exchanges has become more and more intensive.

Over the 45 years of diplomatic relations, moving towards the Australia-Vietnam Strategic Partnership will lead to more regular exchanges between the two countries' leaders and better coordination to deal with economic and transnational issues and to maintain peace and security in the region as well as globally.